Following years of discussions, the Lithuanian parliament endorsed on Thursday the government's proposal to set an income ceiling on social insurance contributions.
© DELFI / Andrius Ufartas

The measure was passed in a vote of 77 to ten with six abstentions.

A ceiling of 120 annual average salaries will be introduced in 2019 and will be lowered to 84 in 2020 and to 60 in 2021.

Proponents say that a ceiling on contributions to the state social insurance fund Sodra will help keep skilled workers in Lithuania and create well-paid jobs. Critics have said, however, that there are no grounds for lowering the tax burden for high earners.

The parliament also approved the government's proposal to shifting a part of social security contributions onto the employee and tax that part at 19.5 percent, and to use central government budget funds as the sole source for paying the basic part of pensions.

BNS
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